Union Pacificuprr/documents/up_pdf_nati… · of $3.3 billion or $6.72 per diluted share. This compares to $2.8 billion or $5.53 per diluted share in 2010, 18 and 22 percent increases,

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Union Pacific2011 SUSTAINABILITY & CITIZENSHIP REPORT

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Published May 31, 2012, via the company’s website at www.up.com. Contact us at [email protected].

inTRoDUcTion . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2011 Sustainability Highlights . . . . . . . . . . . . . . . . 4

Letter to Stakeholders . . . . . . . . . . . . . . . . . . . . . . 5

About This Report . . . . . . . . . . . . . . . . . . . . . . . . . . 6

About Union Pacific . . . . . . . . . . . . . . . . . . . . . . . . 7

Financial Performance . . . . . . . . . . . . . . . . . . . . . . 9

Stakeholder Outreach . . . . . . . . . . . . . . . . . . . . . . 10

Sustainability & Citizenship Goals . . . . . . . . . . . . 12

EnviRonmEnT . . . . . . . . . . . . . . . . . . . . . . . . . 13

Union Pacific’s Environmental Advantage . . . . . 14

Fuel Efficient Locomotives . . . . . . . . . . . . . . . . . . 14

Greenhouse Gas Emissions . . . . . . . . . . . . . . . . 15

Carbon Emission Estimator . . . . . . . . . . . . . . . . . 16

Fuel Reduction Programs . . . . . . . . . . . . . . . . . . . 17

UP Center LEED Certification . . . . . . . . . . . . . . . 17

Environmental Management, Governance and Compliance . . . . . . . . . . . . . . . 18

Exploring and ImplementingNew Technologies . . . . . . . . . . . . . . . . . . . . . . . . . 19

Reduce, Reuse, Recycle . . . . . . . . . . . . . . . . . . . 20

Hazmat and Chemical Risk Reduction . . . . . . . . 22

Environmental Collaboration . . . . . . . . . . . . . . . . 23

Climate Change and Risk Factors . . . . . . . . . . . . 23

Social imPacT . . . . . . . . . . . . . . . . . . . . . . . . . 24

Commitment to Employees . . . . . . . . . . . . . . . . . 25

Military Recruiting . . . . . . . . . . . . . . . . . . . . . . . . . 27

Employee Diversity & Inclusion . . . . . . . . . . . . . . 28

Training & Career Development . . . . . . . . . . . . . . 29

Safe Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Commitment to Public Safety . . . . . . . . . . . . . . . 31

UP CARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Commitment to Communities . . . . . . . . . . . . . . . 35

Economic Development . . . . . . . . . . . . . . . . . . . . 36

Community Giving . . . . . . . . . . . . . . . . . . . . . . . . 38

Commitment to Customers and Suppliers . . . . . 39

Customer Satisfaction . . . . . . . . . . . . . . . . . . . . . 40

Customer Service . . . . . . . . . . . . . . . . . . . . . . . . . 41

Fostering Supplier Diversity . . . . . . . . . . . . . . . . . 43

GovERnancE & EThicS . . . . . . . . . . . . . . . . . 44

Guiding Policies & Principles . . . . . . . . . . . . . . . . 45

Setting Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Employee Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Equal Opportunity & Harassment Policies . . . . . 46

Ethical Standards . . . . . . . . . . . . . . . . . . . . . . . . . 46

Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

REcoGniTion . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Company Awards & Recognition . . . . . . . . . . . . . 48

Employee Awards & Recognition . . . . . . . . . . . . 51

movinG foRwaRD . . . . . . . . . . . . . . . . . . . . . . 52

Additional Resources . . . . . . . . . . . . . . . . . . . . . . 53

Cautionary Information . . . . . . . . . . . . . . . . . . . . . 53

fUTURE REPoRTinG & fEEDback . . . . . . 54

TablE of conTEnTS

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oUR valUES:

focus on performance.

Ensure high ethical standards.

work as a team.

inTRoDUcTion

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• Purchased100newfuel-efficientlocomotives in 2011 with plans to purchase an additional 200 in 2012,retiringolder,lessfuel-efficient locomotives .

• ReceivedtheEPA’sClean Air Excellence Award recognizing emissions reduction innovation .

• AchievedLEEDcertification* for Union Pacific’s corporate headquarters in Omaha, which is nowthelargestLEED-certifiedbuilding in the state of Nebraska .

• Foundnewhomesfor16percentof all Union Pacific outdated electronic assets, thus saving nearly 2,500 devices from the landfill .

• Recycledorre-usedtheother84percent of outdated electronic assets .

• Capturedandrecycledmorethan4 million gallons of fuel and oil .

• Recycledmorethan3,000tons of paper, cardboard, plastics, and other solid waste, the equivalent greenhouse gas emissions from electricity used by more than 400 homes for a year .

• Recycledaquartermilliontons of metal .

• Implementedcriteriatoourequalopportunity and harassment policies that exceed federal and most state employment laws .

• Namedtothe100Best Corporate Citizens list by Corporate Responsibility .

• Thecompensationandbenefitscommittee used information from an independent compensation consultant to ensure competitive salariesandbenefitsfornon-unionemployees and executives .

• Hiredapproximately4,500peoplefor a net increase of about 1,500 full-timeequivalentemployeescompared to 2010 .

• Invested$3.2billionintransportation infrastructure, supporting roughly 6,700 additional jobs .

• Hirednearly850militaryveterans.

• Establishedanall-timeemployeesafety record for the fourth consecutive year with a 1 .15 reportable injury rate, a 16 percent improvement over 2010 .

• Improvedpublicsafetyatrailroadcrossings by 9 percent compared to 2010 .

• Addedemployeeandspousehealth and wellness options by opening a new online Wellness Portal that lets people set and manage health goals .

• Doubledthenumberoffitnesscenters available for employee use, free of charge .

• Donatedmorethan$14millionand supported more than 2,500 nonprofits through the Union Pacific Foundation, matching gifts and corporate contributions .

• Conductedmorethan8,000Union Pacific Crossing Accident Reduction Education and Safety (UP CARES) outreach and training events, reaching more than 700,000 people .

• Launchedtwonewemployeeresource groups, the Asian Employee Resource Organization and UPVETS, serving military veterans .

EnviRonmEnT

Social imPacT

GovERnancE & EThicS

*Achieved February 14, 2012

2011 SUSTAINABILITY HIgHLIgHTS

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Union Pacific’s sustainability story began when Abraham Lincoln signed the Pacific Railway Act of July 1, 1862.

We take seriously our role in the nation’s economy to provide asafe,reliable,fuel-efficientand

environmentally responsible mode of transporting the goods Americans use every day . As we celebrate 150 years in 2012, we acknowledge our past and recognize the importance of planning for future generations of railroaders, customers and the communities where we live and work .

Our growth strategy is to provide customer value, and part of that equation is ensuring our customers’ sustainability efforts are enhanced by using rail . In fact, many customers highlight rail as a key element of their own supply chain sustainability metrics .

A cornerstone of Union Pacific’s growth and sustainability platforms is our record level of capital investment, reflecting our commitment to providing efficient and responsible freight transportation.Thisyearaloneweexpecttospend$3.6billion on capital projects, planning years in advance as we build UP’s rail network to meet the growing needs of our 10,000 customers and help them compete in the global marketplace . These projects – such as Colton Crossing in southern California and our Santa Teresa, N .M ., intermodal and fueling facility – frequently include positive social and economic impacts on communities .

Hiring is part of our growth story . Based on anticipated attrition rates and business growth, Union Pacific expects to hire roughly 4,000 people in 2012 . This is in addition to the4,500employeeswehiredin2011.Thesearegood-paying, American jobs – and the Association of American Railroads estimates that every railroad job supports another 4 .5 jobs elsewhere in the economy .

Technology is important to our sustainability efforts and Union Pacific leads the way with many technology firsts . We developed and implemented the industry’s only ultrasonic wheel crack detection system, allowing us to find flaws in rail car wheels before they reach the surface .

LETTER TO STAKEHOLDERS

Not a single train has derailed from a cracked wheel since we started using this technology two years ago . Another way our technology keeps trains operating safely is through the 4,000 wayside signal detectors we deploy, which process 40 million data points per day from our trains and identify known historical failure patterns in wheels .

Union Pacific’s innovation plays a key role in making rail the most environmentally responsible form of ground freight transportation . We pioneered Genset switching locomotive technology that reduces greenhouse gas emissions by as much as 37 percent compared to older switching locomotives . Gensets are now operated by railroads around the world, and the EPA recognized our efforts with a Clean Air Excellence Award in 2011 . Union Pacific was the first railroad to use video gaming technology to develop video simulation training . This technology provides employees with a solid understanding of how to operate remote control yard locomotives or inspect rail cars before they set foot in a rail yard, creating a safer environment and a more effective training process . We even made this technology available to other railroads .

Our sustainability efforts align with the Global Reporting Initiative’s definition of sustainable development, which is meeting the needs of the present without compromising the ability of future generations to meet their own needs .

Looking to the future certainly was on President Lincoln’s mind when, at the height of the Civil War, he sought a way to connect and secure the great expanse of our nation . Our challenge today is to envision the possibilities of what tomorrow could be . I can’t think of a better way to honor our founder or to create a sustainable future .

Jack Koraleski President and CEO

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Union Pacific has been expanding america’s frontier for 150 years – delivering goods across the country. we embrace the responsibility that comes with being a trusted transportation provider.

That is why we are proud to report our commitments to the environment and our efforts to create

a positive social impact, all while operating ethically and with proper oversight . We used the Global

Reporting Initiative’s 2011 G3 .1 Sustainability Reporting Guidelines as a standard framework .

The information that follows applies to railroad and select other operations . This publication is

primarily focused on initiatives and accomplishments from the 2011 calendar year and includes

2011 data, unless otherwise noted .

ABOUT THIS REPORT

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Ogden

Roseville

Phoenix

Topeka

Seattle

Salt Lake City

Portland

Spokane

Denver

El Paso

Laredo

San Antonio

Brownsville

Houston

New Orleans

Memphis

Little Rock

Kansas City

ChicagoNorth Platte

Cheyenne

Ft.Worth

Dallas

St. Louis

Oakland

Los Angeles

OmahaReno

Las Vegas

Pocatello

Duluth

Minneapolis/St. Paul

Milwaukee

Eugene

San FranciscoStockton

Colton

Wichita

Oklahoma City

Des Moines

Lubbock

Amarillo

Eagle Pass

Pine Bluff

Tucson

Eastport

Long Beach

Nogales

Texarkana

Livonia

Hinkle

Fresno

Calexico

Shreveport

MEXICO

CANADA

The original Union Pacific was created when abraham lincoln signed the Pacific Railway act of July 1, 1862.

Today, Union Pacific Railroad is one of America’s most

iconic and admired companies . It is the principal operating

company of Union Pacific Corporation (NYSE: UNP), which

reportedoperatingrevenuetotaling$19.6billionin2011.

Union Pacific is headquartered in Omaha, Neb ., and

employs more than 45,000 people across our system .

Weprovidesafe,fuel-efficient,environmentally

responsible freight transportation for a diversified group

of business products . Our rails link 23 states and deliver

door-to-doorfreightsolutionsandlogisticsexpertise.

We operate competitive routes from all major West

Coast and Gulf Coast ports, connect with Canada’s rail

systems and are the only railroad to serve all six major

gateways to Mexico .

Union Pacific is a member of several industry, business and environmental organizations:

• AmericanWindEnergyAssociation

• AssociationofAmericanRailroads(AAR)

• BusinessRoundtable

• GlobalEnvironmentalManagementInitiative

• NationalAssociationofManufacturers

• NationalMinoritySupplierDevelopmentCouncil

• UnitedStates-MexicoChamberofCommerce

• U.S.ChamberofCommerce

Union Pacific has remained committed to customer

service, investment and innovation for a century and a

half . As evidenced in this report, we are proud to

continue our legacy by providing quality jobs, minimizing

our environmental impact and contributing to the

communities where we live and work .

ABOUT UNION PACIfIC

Union Pacific by ThE nUmbERS

Route Miles . . . . . . . . . . . . 32,000

Employees . . . . . . . . . . . . . 45,000

Annual Payroll . . . . . . . . . . . $4 billion

Capital Spending . . . . . . . . . $3.2 billion

Locomotives . . . . . . . . . . . . 8,200

Freight Cars . . . . . . . . . . . . 74,500

Customers . . . . . . . . . . . . . 25,000

Community Giving . . . . . . . . . $14 million

All data as of 12/31/11.

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aGRicUlTURal PRoDUcTSWe haul the food that feeds the nation and many parts

of the world, delivering fresh and frozen goods safely and

efficiently . We also ship essential agricultural products

such as whole grains, feed grains and ethanol .

EnERGyCoal generates nearly half of the U .S . electricity

supply, and we deliver more than 20 percent of the

coal American businesses and consumers demand .

DivERSifiED bUSinESS PRoDUcTSUnion Pacific moves the goods american families and businesses use every day. Just about everything in homes, offices, manufacturing facilities, construction sites and stores moves on a train at some point.

ABOUT UNION PACIfIC

chEmicalSUnion Pacific carries the chemicals used to clean

drinking water and produce plastics, as well as fertilizer

to grow our food supply . We transport crude oil extracted

from U .S . shale locations, petrochemicals and soda ash .

aUTomoTivEUnion Pacific operates vehicle distribution centers for

major automotive manufacturers and provides expedited

parts shipping . We are the largest auto railroad carrier

in North America .

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financial PERfoRmancE

Union Pacific reported record 2011 net income

of$3.3billionor$6.72perdilutedshare.This

comparesto$2.8billionor$5.53perdilutedshare

in 2010, 18 and 22 percent increases, respectively .

The company’s operating revenue totaled a record

$19.6billionversus$17billionin2010.Operating

incomeincreased15percentto$5.7billion,upfrom

$5billionin2010.

inDUSTRial PRoDUcTSUnion Pacific ships a variety of raw materials and

finished goods, including steel, pipe, frac sand, military

equipment, wind turbine components and lumber .

mExico maRkETSUnion Pacific is the leading transportation services

provider to and from the United States/Mexico border,

movingroughlytwo-thirdsoftherailfreight.Wearethe

only railroad to serve all six major U .S ./Mexico gateways .

inTERmoDalOne Union Pacific intermodal train can take as many

as 300 trucks off America’s congested highways .

We deliver a wide range of multimodal solutions for

domestic and international freight .

DivERSifiED bUSinESS PRoDUcTS

ABOUT UNION PACIfIC

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we recognize that our reach extends far beyond the rails, so Union Pacific engages a broad range of perspectives in developing citizenship and sustainability priorities. we consider the needs, opinions and ideas of each of the groups affected by our business and reach out to them through a variety of channels.

STAKEHOLDER OUTREACH

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commUniTiES• UnionPacificvolunteers

• UnionPacificFoundation community-basedgrants

• UP CARES, crossing accident reduction and education safety program

• Employeeandcorporategiving

• Nationwide,24-houremergencyhotline:1-888-877-7267

• Safetytrainingforfireandlawenforcement personnel

• UnionPacific/communityemergency response committees

• Employeerecruiting

• State-specificPublic Affairs contacts and outreach efforts

• Public-privatepartnerships

• Facebook and Twitter

cUSTomERS• WebPortal

• NationalCustomerServiceCenter

• UnionPacific account representatives

• Advertising and marketing campaigns

• Customeron-boardingteam

• Electroniccommercecapabilities

• Industry-specificcustomereducation seminars

• Customer news and service updates

• Eventsandtradeshows

• Monthlycustomersatisfactionsurveys

• Partnershipsandmemberships

• Supplychainimpactevaluation for customers

• PinnacleAwardsfor chemicals customers

• Innovativecustomerpartnerships, including TRANSCAER

• News releases

• RSSfeed

EmPloyEES anD RETiREES• UPOnlinedailynewsupdates

• Employeewebsite

• Employeeethicshotline

• InsideTrackemployeenewsletter

• UnionPacific Information Television

• Seniormanagementfieldvisits and town halls

• Onlinetownhalls

• Craft-specificandregionalemployee newsletters

• LaborRelationsConnection,anonline portal for union employees

• Retirees and Families website

• UP Voices grassroots employee network

• Employee Resource Groups

• Safetypolicies,trainingand certification programs

• Educationassistanceandmanagement training

• Friend-to-Friend employee network

• Performancemanagement

• FacebookandTwitter

• Surveysandfocusgroups

• Leadershipmeetings

• Rewardandrecognitionprograms

• Employeeclubs

• Businessethicsbulletins

• Peersupport

invESToRS• Annual Reports and

Proxy Statements

• Annualshareholdermeeting

• Investorconferences

• Earningsconferencecalls

• SEC filings

• Quarterlyearnings

• Newsreleases

• RSS feed

• Emailalerts

• WebsiteFAQ

REGUlaToRy officialS• Voluntaryparticipationininitiatives,

including the Environmental Protection Agency’s (EPA) SmartWay Transportation Partnership

• UnionPacific’senvironmental management program

• Ongoingdialogueviaour Washington,D.C.-basedstaff

• AssociationofAmerican Railroads participation

• OngoingcooperationwiththeCalifornia Air Resources Board and other agencies

• Employeeandcorporateregulatory and legislative advocacy

• Newsreleases

• RSSfeed

SUPPliERS• Competitivebidprocess

• Electroniccommercecapabilities

• Supplier diversity program

• Supplierperformance tracking system

• Supplierqualityprogram

• WebsiteFAQ

COmmUNICATION CHANNELS

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Union Pacific’s culture of innovation means we strive to find new ways to serve our customers, communities and employees.

We work to grow our business profitably and responsibly

by focusing on safety, environmental stewardship,

employee development, community investment and

economic growth . Specifically, our goals are to:

• Operateasafe,efficientandenvironmentally

responsible rail network that supports the highest

levels of customer service .

• Provideemployeeswiththesafestworkenvironment

in the industry .

• Constantlyimproveemployee,customerandpublic

safety through training, education and investment .

• Developemployeeprogramsandprocessesthatmake

us an employer of choice .

• Investinournetworkinfrastructuretoenhanceservice,

productivity and safety .

• Growourbusinessprofitablyandresponsiblyinorder

to invest in future growth and make a positive impact

on our communities, customers and shareholders .

* Using 2000 as a benchmark, attaining our fuel consumption rate goal would represent a 23 percent fuel-efficiency increase over the five-year span.

SUSTAINABILITY & CITIZENSHIP gOALS

ZERoinG in on SafETy

No injury is acceptable. That’s why we

won’t budge on our ultimate goals:

Zero employee injuries

Zero trespasser incidents

Zero vehicle grade crossing accidents

Zero train derailments

fUEl conSUmPTion RaTE anD GhG EmiSSionS Goal

Reduce our locomotive fuel consumption rate

by 1 percent annually from 2011 to 2015, as

measured on a gross-ton mile basis, resulting

in greenhouse gas emissions reduction of

1 percent annually.*

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Union Pacific has been helping connect america with the goods it needs for 150 years. we’re proud of that heritage and recognize it is our responsibility to minimize our environmental impact.

We work to improve the sustainability of our business because it’s important to be good stewards

of the land and because being environmentally sustainable is fiscally responsible . Every gallon

of fuel we avoid consuming, every kilowatt we save and every railroad tie we recycle makes us a

stronger, more successful company . For us, improving environmental performance and business

performance are mutually compatible .

We invest to create and deploy technologies and systems that reduce our environmental impact .

We comply with all laws and regulations and strive to improve our performance in areas such

as fuel economy and greenhouse gas emissions . Our commitment to environmental sustainability

is a key priority in everything we do .

EnviRonmEnT

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Trains are the mostfuel-efficientwaytotransportbulkcargoonland – on average four times more efficient than transit

by truck . A single Union Pacific train can replace 300 trucks, resulting in less wear and tear on roads and fewer traffic

jams . Fewer traffic jams mean reduced fuel usage for drivers and decreased emissions due to idling . Every ton of cargo

that is shipped on our trains instead of trucks lessens potential impact to the environment .

fUEl-EfficiEnT locomoTivESUnion Pacific operates North America’s cleanest and

most modern locomotive fleet .

We are constantly working to upgrade and improve the

fuel-efficiencyofourlocomotivefleet.Since2000,

wehaveinvestedapproximately$6billiontopurchase

locomotives that meet the EPA’s updated emissions

guidelinesandanadditional$200milliontoupgrade

older locomotives in our fleet to reduce emissions and

increase fuel efficiency . That’s more than 3,500 new,

fuel-efficientlocomotivesinall,including100in2011.

Our plans include purchasing an additional 200 in 2012 .

These locomotive purchases allow us to retire older,

less-efficientlocomotives,thusimprovingouroverall

fleet fuel economy and reducing our emissions rate .

Our investments in new switching locomotives such as

thehigh-tech,ultra-lowemissionsGensetswitcherand

long-haullocomotiveswithdistributedpowertechnology,

have helped us realize improved fuel efficiency . In 2000,

on average, we could move a ton of freight 375 miles

on one gallon of diesel fuel . By 2011, our investments in

new technology helped improve that to nearly 500

miles per gallon .

UNION PACIfIC’S ENVIRONmENTAL ADVANTAgE

Union Pacific locomoTivE fUEl EfficiEncy 2000-2011

495 492490

458424

412406397401394392375

2000

400

600

500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

REvEnUE Ton-milES PER locomoTivE Gallon

Union Pacific can move one ton of freight 492

miles on a single gallon of diesel fuel.

To illUSTRaTE ThE bEnEfiTS, if ShiPPED by Rail inSTEaD of by TRUck …

100 truckloads of lumber going from Portland, Ore ., to Fort Worth, Texas, would cut greenhouse gas emissions

by 76 percent, from 340 metric tons of CO2e to 80 metric tons of CO2e .

Source: Union Pacific’s Carbon Emission Estimator

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Reducing greenhouse gas emissions is one of the most important challenges facing the world today.

We recognize this, and we’re working to improve our

long-termsustainabilitybyreducingouremissions,

especially for locomotives, which account for nearly all

of our greenhouse gas emissions (GHG) .

Union Pacific shipped approximately 1 trillion tons of

goods in 2011 . Years of advancements to our technology

and operating methods have resulted in significant

improvements to our fuel consumption and greenhouse

gas emissions rates . Our 19 percent fuel efficiency

improvement since 2000 means we used 1 .23 billion

fewer gallons over that time, the equivalent of more than

one year’s worth of fuel for our company . The fuel savings

equals more than 12 million metric tons of savings in

greenhouse gas emissions, the equivalent annual GHG

emissions from more than 2 .4 million passenger vehicles .

We strive to strengthen our environmental profile and

have a goal of reducing our locomotive fuel consumption

rate by 1 percent annually starting in 2011 through 2015,

which translates directly to an annual 1 percent reduction

in our greenhouse gas emissions rate . Achieving this

goal would represent a 23 percent greenhouse gas

reduction in fuel consumption and greenhouse gas

emissions from locomotives between 2000 and 2015 .

Unfortunately, we did not make our goal in 2011 . Severe

weather, including the excessive Texas drought and

record Midwestern flooding, forced us to send many

trains on indirect routes to their destinations, resulting in

greater fuel consumption . The combination of these

weather-relatedissues,alongwithanimprovingeconomy

that increased freight volumes, required us to pull older,

lessfuel-efficientlocomotivesoutofstorageinorderto

meet customer demand . Despite these challenges, we

remain committed to our goal of achieving a 23 percent

reduction from 2000 levels by 2015 .

We believe we can further reduce our overall greenhouse

gas emissions . We began reporting our locomotive

greenhouse gas emissions in 2009 and expanded our

reportingtoincludenon-locomotiveemissionsin2010.

Union Pacific produced a total of 12,253,099 metric tons

of greenhouse gas emissions from fossil fuels in 2011 .

gREENHOUSE gAS EmISSIONS

9,000,000 13,183,731

13,251,354

13,473,958

13,625,035

14,113,867

13,593,135

14,064,352

13,860,992

11,368,923

10,771,069

10,030,828

12,593,593

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Union Pacific locomoTivE GhG EmiSSionSmetric Tons

Union Pacific’s 2011 greenhouse gas inventory verified by Conestoga-Rovers & Associates. Union Pacific works with Trinity Consultants to compile its GHG inventory. Conestoga-Rovers & Associates and Trinity Consultants are independent organizations. Excludes biomass sources.

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Our2011rateofemissionsincreasedbyone-halfof1percentasmeasured

by gross ton miles . The expanding economy and severe weather patterns

meant that our overall emissions from locomotives increased, from 10,771,069

metric tons in 2010 to 11,368,923 in 2011, a 6 percent increase, while

gross ton miles increased 5 percent . Union Pacific’s emissions from biomass

sources were 32,461 metric tons .

Scope 3 emissions from employee travel totaled 15,661 metric tons . Employee

travel includes rental car fuel and commercial air travel . This is the first time

we reported Scope 3 emissions .

caRbon EmiSSion ESTimaToROur investments in technology, our environmentally sustainable operating

practices and the inherent fuel efficiency of rail mean Union Pacific trains

areaneffectivelow-carbonoptionforshippingfreight.VisittheCarbon

Emission Estimator on our website to see how the carbon footprint for a

Union Pacific shipment compares to other freight transportation .

gREENHOUSE gAS EmISSIONS

EPa clEan aiR ExcEllEncE awaRD We don’t wait for others to come up

with new technologies for improving

our environmental performance . Genset

locomotive switching, a technology we

developed in 2005, cuts greenhouse

gas emissions by as much as 37 percent

and particulate matter by an incredible

90 percent . We own more than half the

300 Gensets operating across the

world, and Gensets are now used by

every major railroad in the United States .

In June 2011, the EPA recognized our

contribution to reduced emissions

when it presented Union Pacific a Clean

Air Excellence Award for our Genset

development . California and Texas, where

Union Pacific has its largest operations,

also have recognized Union Pacific with

their highest environmental achievements

for our Genset development .

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Union Pacific’s three-pronged approach to improving fuel efficiency includes improving operations, incorporating technology and engaging employees.

When it comes to fuel savings, technology only gets you so far . As many

drivers know, a key piece to saving fuel also is how you operate your vehicle .

Reducing idling time and driving at a steady speed, rather than racing to a

traffic light only to stop and start again each time the light turns green,

can do a lot to reduce the amount of fuel you burn, whether you’re driving a

passenger vehicle or operating a 5,000 ton train .

Helpingourlocomotiveengineersoperatetrainsinthemostfuel-efficient

manner means that we can reduce fuel costs and reduce our locomotives’

emissions . Both of these objectives are important to us, which is why we

created the Union Pacific Fuel Masters Unlimited program, which gives

engineers the knowledge and tools they need to squeeze the most power out

of each gallon of fuel . We’ve trained more than 7,000 engineers using this

program, which is more than 95 percent of our road locomotive engineers .

We continue to invest in fuel efficiency technology, train employees how to

use it and support ongoing operating best practices improvements .

fUEL REDUCTION PROgRAmS

Union Pacific cEnTER lEED cERTificaTion We built Union Pacific

Center, our corporate

headquarters in Omaha,

Neb ., to be environmentally sustainable

from the ground up . We have continued to

innovate, update and improve the building

and the way we manage it, including:

• Implementing a green cleaning program

– more than 75 percent of our cleaning

supplies meet the LEED standard .

• Increasingrecyclingfromjustover

half our building’s solid waste to nearly

70 percent .

• Installinglow-mercury,energy-

efficient bulbs .

• Reducingannualpotablewater

consumption at our headquarters by

over half a million gallons – that is

a reduction of more than 130 gallons

for every headquarters employee .

We’re proud of what we’ve accomplished

with Union Pacific Center in the last

several years . Our success has not gone

unnoticed . In February 2012, the U .S .

Green Building Council awarded Union

Pacific Center a Silver Existing Building

certification . Union Pacific Center has

more than 1 million square feet, and it is

nowthelargestLEED-certifiedbuilding

in Nebraska – proof that size and

scale can be perfectly consistent with

environmental sustainability .

Union Pacific Center in Omaha, Neb.

18

Ensuring that our network is achieving the highest possible levels of environmental performance requires sophisticated systems and programs. visit our website to learn more about how Union Pacific manages our environmental policy to ensure that we are reducing our impact on the environment and remaining compliant with all regulations and laws.

ENVIRONmENTAL mANAgEmENT, gOVERNANCE AND COmPLIANCE

19

REDUcED EnGinE iDlinGLocomotive engines may be kept idling for several

reasons: in a yard, they idle between work events; on the

main line, they idle while meeting or passing other trains;

in cold temperatures, they idle to keep their fuel and

water lines from freezing . Union Pacific has developed a

comprehensive plan to reduce the amount of time

locomotive engines idle .

As a part of this strategy, all new locomotives have

automaticStop-Startequipmentandolderlocomotives

are being retrofitted with it, which eliminates unnecessary

idling.Locomotiveshutdownscansave15-24gallons

of fuel, per locomotive, per day .

More than 70 percent of our locomotive fleet is equipped

with this technology . Generally, Union Pacific’s locomotive

shutdown rules reduce emissions and also save fuel .

Locomotives are to be shut down if left standing 15

minutes or longer, unless the temperature is expected

to drop below 35 degrees .

inTERmEDiaTE linE-haUl locomoTivEWhen you invest in developing innovative technologies,

it’s inevitable that not all of them will pan out the way

you expect . Even if a given technology isn’t right for

Union Pacific, it might work for someone else . The

intermediateline-haullocomotive,usedtomovetrains

shorter distances rather than across the continent, is a

good example . Working with suppliers, we helped

developandtestarevolutionaryintermediateline-haul

locomotive that significantly reduces nitrogen oxide

emissions by routing exhaust through a diesel oxidation

catalyst . The technology works – and while we learned

that it’s not yet right for our route structure, we expect

it to serve as a stepping stone for other innovative

ways to reduce our fuel usage and emissions . These

locomotives are now being used in Southern California

on the Pacific Harbor Line, a short line railroad, helping

to reduce emissions in the Los Angeles area .

GEnSET, alTERnaTivE fUElS anD oThER EmiSSionS-REDUcinG TEchnoloGiESUnion Pacific is finding ways to improve how we move

our trains and run our operations, resulting in better

environmental performance . Visit the environmental

section of our website to learn more about these and

other new technologies .

Union Pacific has pioneered locomotive technology research, resulting in clean technologies that have become standard for railroads across the country. we’re still working hard to develop new technologies that can help us move goods in an even more sustainable fashion.

EXPLORINg AND ImPLEmENTINg NEW TECHNOLOgIES

20

E-waSTE If improperly disposed, computers, phones and other electronic goods can

create environmental hazards . Union Pacific makes it a practice to recycle

electronics that have reached the end of their useful life,

commonlyknownase-waste.Thecompanyrecycledor

distributed more than 500,000 pounds of electronic

equipment and nearly 1 .2 million pounds of signal

batteries in 2011 .

We also realize that just because an electronic

device is no longer useful for Union Pacific, that

doesn’t mean it isn’t useful to anyone else . Union Pacific’s

re-useinitiativeaimstofindnewhomesforourusedelectronics.That

includesre-sellingsomedevicesandprovidingequipmenttononprofit

organizations in developing countries . In 2011, the initiative found new

homes for 16 percent of Union Pacific’s used electronic assets – nearly

2,500 devices .

PaPERLike any large company, we have a lot of paperwork – and in

many cases, this translates into a lot of paper consumption .

We’re working to reduce our overall paper consumption .

We’ve programmed our printers to use both sides of each

piece of paper . We’ve also refined the layout of the “flight

plan” our locomotive engineers are required by the federal

government to receive at the beginning of each train run .

This document includes information such as the contents of each car, and

we found a way to include all the important information while making the

documentshorterandlesspaper-intensive.

REDUCE, REUSE, RECYCLE

RESUlTS SPEak foR ThEmSElvESBetween 2007 and 2011, we reduced

total paper purchases from more than

300 million sheets to almost 180 million

– a decrease of more than 120 million .

21

EmPloyEE STEwaRDShiPUnion Pacific’s employees play a role in our efforts to

reuse and recycle materials . We make it easier for

everyone to conserve materials by providing education

and training on topics like recycling guidelines and

fuel conservation, and by providing recycling at 150 of

our locations in nearly 80 cities across the country .

Union Pacific recycled more than 3,000 tons of paper,

cardboard, plastics and other solid waste in 2011 . That’s

the equivalent greenhouse gas emissions that provide

electricity to more than 400 homes for a year . We also

recycled more than a quarter million tons of metal .

Our employees care about and understand how to

cut waste and improve Union Pacific’s environmental

stewardship . Starting in 2008, we’ve tapped into this

knowledge base through a process for employees to

suggest tips and ideas for improving our sustainability .

So far, we’ve received more than 1,200 ideas and

more than 40 percent of these have led to changes in

our programs and processes .

fUEl anD oilWe use processes and equipment that allow us to

recycle 100 percent of the used oil and fuel captured at

our fueling and servicing facilities . This includes drip

pans and other collection systems under our engines to

catch spills, separators that extract engine oil from

wastewater, and automatic fuel nozzles that shut off when

a tank is full, preventing overflow . In 2011, we recycled

more than 4 million gallons of oil and fuel .

RailRoaD TiESThe wooden railroad tie has been a staple of our

infrastructure for 150 years . In recent years, Union Pacific

has been laying a new type of composite railroad ties

made of 100 percent recycled material and 100 percent

recyclable at the end of their useful lives . These ties

are particularly effective in regions like the Gulf Coast,

where moisture and insects shorten the useful life of

traditional wooden ties . To understand these ties in a

tangible way, each tie represents the equivalent of

1,1001-gallonplasticmilkjugsbeingrecycled.Union

Pacific has laid more than 200,000 composite ties in the

lastfouryears,theequivalentof220million1-gallon

milk jugs being recycled .

REDUCE, REUSE, RECYCLE

lED locomoTivE liGhTS

UnionPacificisworkingonanemployee-

initiated project to convert our locomotive fleet’s

incandescent bulbs to Light Emitting Diodes

(LED) . LEDs are 90 percent more energy

efficient than traditional light bulbs . Electricity

for locomotive lighting is powered by the diesel

engine . With more than 90,000 bulbs in our

locomotive fleet, this conversion represents a

significant undertaking and the potential for

meaningful energy savings .

22

Union Pacific complies with all laws and regulations on hazardous materials and chemical

transportation . We are required by federal law to transport hazardous materials, and 99 .99

percent of the chemicals we ship for our customers move without incident . We will not be

satisfied until we meet 100 percent of our objectives . Visit our website to learn more about

our hazardous material management and chemical risk reduction policies and practices .

HAZmAT AND CHEmICAL RISK REDUCTION

23

when it comes to protecting the environment and improving environmental sustainability, Union Pacific can’t do it alone. we rely on strong relationships with a range of public and private-sector partners to design and implement practices that reduce the impact of our operations on the environment.

In 2011, Union Pacific expanded efforts with the Global Environmental Management Initiative and

the Environmental Defense Fund’s Climate Corps program . See our website for more information

on these and other important collaborative efforts .

climaTE chanGE anD RiSk facToRSUnion Pacific is committed to being part of the solution to climate change challenges and

considers risks associated with climate change in our regular activities .

This isn’t just because we care about being good stewards of the land – it’s also good business

tolimitourexposuretotherisksofclimatechange.Webelievethatanylong-termapproach

to the climate change challenge must include measures that ensure a reduced carbon footprint

as well as economic growth and prosperity . Our trains are part of this solution by providing

afuel-efficient,lower-emissionswaytoshipgoodstomarketandconnectbuyersandsellers.

We are taking concrete actions today to strengthen our railroad’s ability to withstand future changes

and events that might be associated with climate change . It is possible that future legislative

and regulatory action on climate change could affect our operations and financial performance

(see the risk factors in our AnnualReportonForm10-K) . However, we are currently unable

to predict such impact . We explore new ways to increase our fuel efficiency and reduce our fuel

consumption rate by constantly working to develop innovative locomotive technology, strengthen

engineer training and implement employee development with an eye toward conservation .

ENVIRONmENTAL COLLABORATION

24

at Union Pacific, we have a reputation for getting the job done and doing it well. Equally important is the way we do it – safely, ethically and respectfully. we want to be as vital to our nation’s future as we’ve been to its history.

That means creating an environment that attracts the best people to do their best work and

building dynamic relationships with the communities we serve . An engine of economic change,

Union Pacific added thousands of employees to our payroll for the second straight year and

helped create even more jobs through economic development projects . We are positioned to

lead our industry in the areas that impact people most, areas such as safety, job creation,

customer satisfaction and community education .

Social imPacT

25

our employees don’t just work for Union Pacific – they are Union Pacific. That’s why we offer challenging and rewarding work to fit the diverse needs, talents and ambitions of the people in our workforce. we pride ourselves on hiring the right people and providing them with the resources, training and support they need to reach their potential.

COmmITmENT TO EmPLOYEES

26

* Union Pacific has managed healthcare premium costs for its nonunion plans. Union plans are nationally negotiated.

COmmITmENT TO EmPLOYEES

bEnEfiTS As healthcare costs continue to rise, Union Pacific has

kept employee premiums below the national average .*

Specific benefits vary based on whether employees are

nonunion or part of a collective bargaining agreement .

Union Pacific offers among the best health and wellness

and retirement packages in the industry .

wEll-bEinGSince the launch of our wellness program 25 years ago,

we have expanded the number of tools available to help

our employees make healthy choices and proactively

address health concerns, including stress, smoking,

diabetes and depression . The program offers employees

a variety of ways to reach their health goals, including:

• Wellness portal . New in 2011, a confidential,

personalized online tool that lets employees assess

their health, set goals, build a plan and track progress;

also available to spouses and domestic partners .

• Health Savings Account . Incentive contributions of

upto$2,800perfamilyand$1,250forindividuals

participating in the wellness incentive program –

including the addition of spouse incentives in 2012 .

• Occupational Health Nurses . More than 40 nurses

equipped with special training on railroad culture and

safety who serve as trusted resources for employees

in the field .

• System Health Injury Protocol II (SHIP II) .

Employees at risk of injury due to lower fitness levels

are paired with personal trainers to improve their

overall wellness .

• Fitness centers . More than 2,800 facilities are

available nationwide to let employees exercise free of

charge – double the number available in 2010 .

• Employee Assistance Program.Short-termcounseling,

guidance and referral services to employees and their

familieswithpersonalandwork-relatedproblems.

• Peer Support . A team of more than 1,000 employee

volunteers trained to support fellow employees

and their families through physical, psychological or

emotional stress .

• Tobacco cessation.Smoke-freeworkenvironment,

lifestyle coaching and pharmacological interventions

for those trying to quit .

• Annual Health Wealth Expo . Education from

health experts to approximately 2,000 employees

and their spouses annually; includes seminars, free

screenings, flu shots and even a farmers market

offering fresh produce .

• Friend to Friend Network . Financial assistance for

active or retired railroaders and their immediate families

who have suffered a medical emergency or a disaster

that forced them out of their homes; helps an average

of two families every day .

27

REcRUiTinGUnion Pacific hired approximately 4,500 union and professional employees in 2011 and we plan to hire about 4,000 in

2012, based on attrition and business growth . We recruit in our communities and at colleges to find the most

qualified employees .

community• Participatedindiversityeventsandjobfairs

• Attendedcareerdaysathighschoolsinthecommunities we serve

• Educatedmilitaryveteransaboutcareer opportunities at military career fairs

• Developedpartnershipswitharea employment organizations

college• Metwithmulticulturalbusinessstudentgroups

• Conductedclassroompresentationstocommunicatecareer opportunities

• Ledcareerservicesroundtables

• Socializedatmeet&mingleevents

• Metwithspecializedstudentgroups

• Sponsoredexecutiveluncheons

• Participatedindiversityleadershipsymposiums

• Heldmockinterviews

military RecruitingFormer service men and women fit well

into the culture and fabric of Union

Pacific . They are dedicated,

committed and trained, all traits that

allow for a smooth transition into

the quality jobs that we are able to

provide . We actively recruit and hire

military men and women . Since 9/11, Union

Pacific hired more than 7,000 employees with

military experience . Overall, about 20 percent of

the company’s 45,000 employees are veterans .

In 2011, the National Chamber Foundation, the nonprofit

think tank of the U .S . Chamber of Commerce, presented

Union Pacific Railroad the Hiring Our Heroes Award

for Post 9/11 Veteran Employment and Internships . The

company was nominated by a variety of nonprofit and

veteran services organizations for its commitment to hiring

and supporting military veterans . Union Pacific was the

only railroad to win a Hiring Our Heroes award .

To learn more about jobs at Union Pacific or to apply

for a position, visit www.unionpacific.jobs.

COmmITmENT TO EmPLOYEES

28

EmPloyEE DivERSiTy & inclUSionTo best serve our customers, Union Pacific draws upon the expertise and

experiences of individuals from all backgrounds . That commitment doesn’t

end with recruitment . A number of employee resource groups provide a

community to support recruitment, retention and career advancement – and

keep diversity a top priority of our corporate leadership .

We are continually evaluating these groups and adding new ones to

support the personal and professional growth of our employees . This year,

we launched two new resource groups, the Asian Employee Resource

Organization and UPVETS .

EmPloyEE RESoURcE GRoUPS inclUDE:• AsianEmployeeResourceOrganization

• BlackEmployeeNetwork

• CouncilofNativeAmericanHeritage

• LatinoEmployeeNetwork

• Lead,Educate,AchieveandDevelop (women’s network)

• UPVETS(militaryveterans)

In addition, we provide emerging professionals an opportunity to build a

communitywithco-workersthroughourUPTiesemployeegroup.

It is designed to strengthen their understanding of the company, heighten

leadership skills and establish professional connections .

COmmITmENT TO EmPLOYEES

Roger Sturman, father of Union Pacific senior claims representative Brent Sturman and a former electrician in Idaho Falls, was featured in the company’s 1970s

“We Can Handle It” ad campaign.

fivE GEnERaTionS on ThE RailSTestament to Union Pacific’s

sustainability as an employer, many

families have had multiple generations

work at the railroad . Few, however, can

match the pedigree of the Sturman

familyinPocatello,Idaho.Thefive-

generation railroading family’s history

dates back to the turn of the century

when William Sturman joined the

Oregon Shortline Railroad as a fireman .

Today,hisgreat-greatgrandsonBrent

works in our Claims Department .

Between the two were Earl, a crane

operator in the Pocatello wheel shop;

Roderick, a blacksmith and union

steward; and, Roger, an Idaho Falls

electrician and locomotive engineer who

was also featured in Union Pacific’s

1970s We Can Handle It advertising

campaign . Incidentally, Brent’s

grandfather on his mother’s side also

worked for Union Pacific, as a night

watchman for the Pocatello shops .

URban lEaGUE REcoGniTionUnion Pacific Senior Vice President

– Human Resources Barb Schaefer

(center) accepted a diversity and

inclusion award on behalf of the

company from the Urban League of

Nebraska, which recognized Union

Pacific’s commitment to encouraging

and celebrating diversity .

PHOTO BY HERB THOmPSON, THOmPSON PHOTOgRAPHY

29

EmPowERinG EmPloyEE voicESUPOnline is our online employee resource hub . Through it, employees are able to provide feedback and recognize

eachotherforajobwell-done.In2011,employeespostednearly1,700commentstoarticlespublishedonourdaily

newswire . They also posted 735 “service salutes .” Launched in July 2011, service salutes provide employees a public

platformtocommendcoworkersforextraordinaryeffortsintheirday-to-dayjobactivities.

TRaininG & caREER DEvEloPmEnTBecause our employees are our greatest asset, they are also one of our greatest investments . To safely and

successfully navigate new technologies and develop the skills that will keep us at the top of our industry, we offer

employee training, educational assistance and career development . In addition, daily job briefings, rules testing

and safety training are integrated into all work processes .

Our training and career development programs include:

• Operations Management Training Program.8-24

monthprogramfordegreed,non-unionprofessionals,

training young leaders in engineering, mechanics

and transportation logistics .

• Education Assistance . Up to 85 percent of the cost

oftuitionforfull-timeemployeestoenrollinjob-or

career-relatedcoursesataccreditedschools,colleges

and universities; increased to 100 percent of tuition

effectiveJanuary1,2012,uptoamaximumof$3,500

per calendar year .

• Virtual Simulation Training.Video-gamingstyle

simulation training pioneered by Union Pacific and

licensed to other railroads and industries provides

trainingwithreal-timefeedback,allowingemployees

to become familiar with rail yard and locomotive

operations in a safe environment .

• Management Training . Leadership and skills

performance training throughout individuals’ careers;

10,451 total development course completions in 2011

included a new and highly attended Communicating

for Results course .

COmmITmENT TO EmPLOYEES

30

1.152011

1.372010

1.452009

1.592008

1.732007

1.692006

1.862005

1.762004

1.932003

2.412002

SafE woRkPlacEUnion Pacific’s 1 .15 reportable injury rate in 2011 was

the best in company history, exceeding 2010’s record

performance . From 2002 to 2011, the rate improved by

an incredible 52 percent . We are proud to have an

exceptional safety record in what is already the safest

industry for ground freight transportation .

Union Pacific employees lead our company’s

commitment to a Total Safety Culture (TSC) . Through

a voluntary program, they improve employee safety

with training and providing observations and feedback .

TSC directly empowers our union employees to

addressat-riskbehaviors.Itreceivesthefullbacking

of senior management .

Six yEaRS inJURy fREEGang9056,a25-memberconstructioncrewbasedinColorado,has

completed projects across the Northern Region . And they’ve done it

injury free for six years . The impressive safety record, dating to July 2005,

is a product of great communication and frequent safety briefings .

“They have very thorough safety briefings every day,” said M . Cole Nelson,

facilitator-TotalSafetyCulture.“Wheneverthereisachangein

conditions, they brief again . So if conditions change every two hours,

they brief every two hours .”

When the TSC implementation team meets to discuss new safety methods, they talk about potential risks that are

occurring, and those that might arise, to investigate them before there’s an incident or problem . According to Nelson,

the process empowers employees . Sometimes the least outspoken employees come up with the best ideas .

52%Reduction since 2002

REPoRTablE inJURy RaTES REDUcED ovER TimE

COmmITmENT TO EmPLOYEES

Reportable injury rate is calculated as the total number of injuries reported to the Federal Railroad Administration per 200,000 worker hours.

31

at Union Pacific, our commitment to safety is evident in everything that we do. we partner with local community teams to collaborate, educate and innovate. again, our goal is – and will always be – to eliminate accidents entirely. Through media outreach, education programs, strategic partnerships and our own highly trained police force, we aim to do just that.

COmmITmENT TO PUBLIC SAfETY

32

EliminaTinG Rail cRoSSinG acciDEnTSWe work with communities to identify and remove

unnecessary crossings and to improve safety at the points

where the roads and the rails meet . We operate more

crossings than any other railroad and in 2011 collaborated

with state and local governments to reduce crossing

accidents by 9 percent .

With feedback from Union Pacific, government officials

determine where signals should be placed and when

crossing improvements and safety upgrades are needed .

We then implement the infrastructure improvements

and work with local law enforcement personnel to help

ensure that people obey crossing signals .

2.672.78

2.862.72

3.51

2.37

2.11

2.32

2.11

2.80

Crossing Accidents

2.61

3.36

201120102009200820072006200520042003200220012000

40%Reduction since 2000

cRoSSinG acciDEnT RaTE*

COmmITmENT TO PUBLIC SAfETY

* Accidents per million train miles.

33

UP caRESThrough our public safety initiative, Union Pacific Crossing Accident

Reduction Education and Safety (UP CARES), we work with members of

the communities we serve in a concerted effort to change unsafe behavior .

More than 8,000 UP CARES outreach and training events reached more

than 700,000 people in 2011 . Our proactive outreach efforts resulted in delivering our safety

message to 55 percent more people in 2011, compared to 2010 . UP CARES activities include:

• Gradecrossingenforcementwithlocal,countyandstatelawenforcementagencies.

• Safetytrainsthatprovideafirsthandlookatwhatlocomotiveengineersseewhen

they operate trains through a community .

• Communicationblitzesthatincludecommunityeducationeventsandmediaoutreach.

In addition, Union Pacific helped found and now collaborates with Operation Lifesaver, an

independent nonprofit safety education and outreach organization with the mission of ending

collisions, deaths and injuries at rail crossings .

COmmITmENT TO PUBLIC SAfETY

camPaiGn REminDS SoUTh TExaS TRUckERS To SToP foR TRainS Union Pacific launched an outdoor billboard campaign aimed at getting

South Texas truck drivers to safely use railroad crossings . Reaching an

estimated 1 .3 million drivers between San Antonio and Laredo, the

bilingualcampaignpairsavisualofan18-wheelerstoppedorstuckon

railroad tracks with simple phrases, such as, “Always expect a train .”

“Union Pacific is raising the rail safety message to remind professional

truck drivers of their responsibility to cross the tracks safely,” said Danny

Valdez, Webb County judge . “The billboards will also reach the general

public, which will make our community even safer .”

In addition to the billboards, our San Antonio Service Unit public safety

team regularly meets with trucking companies to educate management

and drivers, organizes safety blitzes at key crossings and conducts UP

CARES efforts with the Texas Department of Public Safety .

Webb County Commissioner Jerry Garza (left) and Webb County judge Danny Valdez unveil a miniature billboard in Laredo, Texas.

34

innovaTivE SafETy TEchnoloGyWe continue to incorporate new safety technologies into

our operations . Although our derailment reportable rate

decreased 32 percent from 2001 to 2011, derailments

increased in 2011 over the previous year . As we anticipate

continued growth, we remain focused and committed to

improving processes and investing in new technologies

that will improve safety for our employees and the

communities we serve . Technologies include:

• Distributed Power Units . The process of placing

locomotives in the middle and/or end of trains instead

of the front to reduce the physical forces, making

trains less prone to derailments and facilitating more

even braking, reducing wheel and track wear .

• Ultrasonic Wheel-Defect Detection . A system that

scanseverywheelinourcoal-carfleetevery60to90

days in an effort to eliminate derailments caused by

broken wheels . Not a single coal car has derailed due

to a cracked wheel since implementing this system

two years ago .

• Wayside Detectors . 40 million data points are analyzed

daily from data collected at more than 4,700 special

detectors deployed across our network helping to more

accurately identify and repair potential failures in rail

equipment components .

• Motorist Safety Reporting.Afirst-of-its-kindsystem

that allows train crews to report close calls with motorists

andpedestrians,pinpointinghigh-risklocationsand

making data accessible to both Union Pacific and

outside agencies to support development of safety plans .

EmERGEncy TRaininG & RESPonSE SySTEmSUnion Pacific trained more than 3,500 local, state and

federal first responders on ways to minimize the impact

of a derailment on a community . We also participate

in industrywide whistle stop training tours . More than

COmmITmENT TO PUBLIC SAfETY

8,000 local emergency responders have been trained

through these locally administered programs at Union

Pacific-sponsoredsites.

In addition, through our participation in TRANSCAER

(Transportation Community Awareness and Emergency

Response), we annually coordinate dozens of drills

reaching thousands of participants to help communities

prepare for and respond to a possible hazardous

material transportation incident . We also partner with

community stakeholders in local safety efforts and

provide them with information about chemicals moving

through their area . Union Pacific requires our hazardous

materials managers to actively participate in state and

local planning committees with representatives from

local fire and health departments, schools, transportation

departments and members of the public .

SafETy ThRoUGh SEcURiTyUnionPacificoperatesa24-hoursecurityprogramon

whatamountstoa32,000-mileoutdoorfactory.Aspart

of our efforts to keep trains secure and communities safe,

weemploystate-of-the-artsecuritytechnologytodetect

unauthorizedaccess.Inconjunctionwithourownhighly-

trained, commissioned police force, Union Pacific

coordinates security efforts with U .S . Customs and Border

Protection (CBP), the U .S . Coast Guard, the Federal

Bureau of Investigation, the Central Intelligence Agency,

the Department of Homeland Security, the Transportation

Security Administration and local law enforcement .

Union Pacific was the first U .S . railroad to be named a

partnerintheCustoms-TradePartnershipAgainst

Terrorism(C-TPAT),aCBPprogramdesignedtodevelop,

enhance and maintain security processes throughout

the global supply chain .

35

many of the more than 7,000 communities throughout our system can trace their origins directly to a Union Pacific depot. we grew up together. we’re committed to helping those communities continue to grow and thrive through company programs and the Union Pacific foundation. we seek to enhance and expand these relationships for the good of the communities themselves, and the good of our employees and customers.

COmmITmENT TO COmmUNITIES

36

Economic DEvEloPmEnTUnlike trucks, barges and airlines, freight railroads own,

build and maintain the infrastructure on which we and

others operate .

From 2000 to 2011, Union Pacific invested more than

$31billionintracks,bridges,tunnels,signals,terminals

andsafetyequipment.Wespent$3.2billionin2011

andplantospendarecord$3.6billionin2012.

Railroad infrastructure is supported largely through private

investments, not taxpayer dollars . In the most recent

study published by the AAR, Union Pacific’s spending

surpasses highway spending by state agencies in 46

states, with the exceptions of Texas, Florida, Pennsylvania

and California . According to the AAR, every railroad job

supports an additional 4 .5 U .S . jobs . Railroad business

activities – and buying power – support an additional 1 .2

million jobs across the broader economy .

state employees Payrolls* Route Miles capital spending*

in-state Purchases*

Arizona 1,269 101.6 642.0 113.3 34.3Arkansas 2,688 202.6 1,327.0 109.0 34.3california 4,741 399.7 3,228.0 241.2 207.0colorado 1,329 112.0 1,535.0 67.2 230.0idaho 945 77.6 849.0 58.4 34.2illinois 4,035 327.3 2,201.0 136.7 1,754.0iowa 1,796 138.8 1,399.0 92.8 90.2Kansas 1,518 142.3 2,205.0 103.9 205.7Louisiana 1,117 100.4 1,138.0 56.3 23.8Minnesota 468 37.8 646.0 25.7 95.6Missouri 2,713 191.2 1,483.0 78.2 383.4Montana 14 1.2 125.0 ** 3.5nebraska 7,954 987.7 1,068.0 224.2 196.2nevada 559 40.2 1,193.0 68.5 52.0new Mexico 321 23.6 618.0 42.9 1.8oklahoma 383 35.4 1,173.0 51.1 130.5oregon 1,592 126.6 1,073.0 132.1 159.1tennessee 57 3.4 14.0 ** 100.5texas 7,768 633.6 6,319.0 529.7 2,482.0utah 1,400 121.8 1,250.0 62.2 201.0Washington 309 24.0 532.0 22.1 110.6Wisconsin 364 33.1 928.0 10.7 75.5Wyoming 1,330 100.7 879.0 106.8 91.9

2011 data *in millions **Nominal capital spent due to low route miles in state

COmmITmENT TO COmmUNITIES

Economic imPacT: STaTE by STaTE

37

COmmITmENT TO COmmUNITIES

REDUcinG conGESTion in SoUThERn califoRnia In November 2011, Union Pacific broke ground on a new “flyover” grade

crossing in Colton, Calif . The Colton Crossing project will help alleviate

congestion at the current crossing, which accommodates more than

100trainsdaily,oneofthebusiestat-graderail-to-railcrossingsinthe

nation.Whencomplete,east-westUnionPacificlineswillpassoverthe

north-southBNSFrailroadtracks.Thiswillbeamajorenhancementto

Colton’scurrent“diamond”crossing,whichrequireseast-westtrainsto

stopwhilenorth-southtrainspassandviceversa.

This will result in more reliable service for our customers, reduced delays

for trains and automobiles in the region, improved air quality for Southern

California and reduced ambient noise levels .

The$202millionproject wasfundedbyUnionPacificandBNSF,along

withfederalgrantsandtaxpayer-approvedstatefunding.

awaRDinG chEmical TRanSPoRTaTion SafETyUnion Pacific named 74 companies as recipients of its 2011 Pinnacle

Award for chemical transportation safety . The annual award recognizes

Union Pacific customers that implemented successful prevention and

correctiveactionplansandachievedarateofzeronon-accidentreleases

for shipments of regulated hazardous materials .

We work closely with our customers to help prevent a release during

transit of chemical shipments and jointly demonstrate a commitment to

the safe transportation of hazardous materials .

Non-accidentreleasesofhazardousmaterial, such as leaks and splashes

from improperly secured or defective valves, declined more than 10

percent on Union Pacific’s network from 2003 to 2011 . This was due in

part to increased inspections by the railroad’s hazardous materials safety

field personnel and customers adhering to the Pinnacle Award criteria .

Union Pacific Executive Vice President-Operations Lance Fritz spoke to the community at the Colton Crossing ground breaking.

38

commUniTy GivinG

Union Pacific foUnDaTionThe Union Pacific Foundation is the philanthropic arm of

Union Pacific Corporation and Union Pacific Railroad .

We believe that quality of life in the communities where our

employees and customers live and work is an integral part

of our own success . Since 1959, we have distributed funds

to qualified organizations in communities served by Union

Pacific . The Foundation is not endowed, but is funded each

year from the operating profits of Union Pacific Corporation .

TheUnionPacificFoundationdonated$14millionin

community giving and supported more than 670 nonprofit

organizations . Combining those efforts with corporate

support and employee matching gifts, Union Pacific helped

more than 2,500 nonprofit organizations . We award grants

through an annual online application process available to

nonprofits located in Union Pacific communities .

GivEPlUSUnion Pacific is committed to improving quality of life in the communities we serve . Our

employees demonstrate this commitment when they give their own money or volunteer their

personal time . We designed the GivePLUS program to encourage and support employee

involvement . It has two main components:

• MoneyPLUS . Supports and extends financial contributions to qualified

501(c)(3) nonprofit organizations .

• TimePLUS.Providesa$250giftfromUnionPacifictoorganizations

where employees volunteer .

COmmITmENT TO COmmUNITIES

Union Pacific’s Mike Brazytis (left) and Ivan Jaime (right) present a Union Pacific Foundation donation to Sylvia Montemayor from the Eagle Pass Library Foundation in Texas. Eagle Pass mayor Ramsey English Cante also participated.

39

we work hard to create value for our customers. from consistently transporting products safely and on time, to developing new products that serve our clients’ needs, our customer satisfaction scores have reached record levels. our customers appreciate our innovative processes, employee responsiveness, problem-solving skills and strong rail network.

COmmITmENT TO CUSTOmERSAND SUPPLIERS

40

928989

83

79

72

64

2011201020092008200720062005

COmmITmENT TO CUSTOmERSAND SUPPLIERS

cUSTomER SaTiSfacTion

TomeasurethevalueUnionPacificprovidestocustomers,wesenda35-questionsurvey

tomorethan100customerseachmonth.Keyperformanceindicatorsincludeon-timedelivery,

service consistency, pricing, total transit time, problem resolution and information accuracy .

Focusing on customer value has been key to improving our customer satisfaction results, which

wereatanall-timebestin2011.

41

COmmITmENT TO CUSTOmERSAND SUPPLIERS

cUSTomER SERvicE

We pride ourselves on the service we provide to customers . At Union Pacific, we offer comprehensive

freight transportation solutions . We help customers take advantage of the environmental benefit

and lower cost of shipping by rail . We can handle nearly every type of shipment, whether or not a

facility is located alongside rail . We use our extensive network to coordinate shipments with other

railroadsandprovideover-the-roadtransportationacrossNorthAmericaandbeyond.Thatiswhy,

year after year, our customers recognize our responsiveness, process standardization, problem

solving and consistent transportation service performance .

innovaTinG To SERvE oUR cUSTomERSUnion Pacific wants to be seen as a valued resource and partner to our customers . That’s

why we’re always looking for new transportation solutions that will allow us to serve them even

better . Our solutions include:

• AutoFlex:90-foot-longconvertible,multilevelrailcarsthatcanbeeasilytransformedfromtwo

to three decks based on the customer’s vehicle shipment needs . Union Pacific holds 15 patents

related to the design and process that resulted in its development by more than 200 employees

from De Soto, Mo .

• Plant-to-Port:Afirst-of-its-kindtransportationandtransloadservicethatdeliversdoor-to-door

supply chain logistics for agricultural clients, beginning with distillers dried grains and eventually

serving bulk grain and processed grain products .

• Pipeline Express: Union Pacific’s Pipeline Express serves the oil and gas steel pipeline

industrywithtruck-competitivetransittimes,arailnetworkthatalignswellgeographicallywith

newpipelineprojects–particularlyrelatedtoshale-relateddrilling–andsiteselectionsupport

for customers that is unmatched in the industry .

imPRovinG cUSTomERS’ SUPPly chain By evaluating their supply chains, customers find they can reduce their overall environmental

footprints by shifting freight from trucks to rail . Union Pacific customers are able to leverage

the environmental benefits of shipping by rail to haul their products . According to the EPA, trains

arethreetimescleanerthantrucksintermsofemissions.Ifjust10percentofthelong-haul

freight currently moved on highways was diverted to rail, annual fuel savings would exceed

1 billion gallons .

42

COmmITmENT TO CUSTOmERSAND SUPPLIERS

aUToS TEam laUnchES GREEn RamP iniTiaTivEUnion Pacific’s autos team launched its Green Ramp

Initiative to reduce the railroad’s environmental footprint,

putting emphasis on progressing a series of projects

that benefit the environment as well as contribute to safety

and operational efficiencies:

• Geographical baying . Through this process, automobiles

are unloaded from trains and parked, or “bayed,” at facilities

in a way that minimizes their dwell time in terminals and the

amount of shuttling trucking companies must do to identify

and pick up loads .

• Electric vehicle charging stations . Fifteen auto facilities

areoutfittedwith220-voltchargingstationstosupport

electric vehicles, such as the Nissan Leaf and Chevy Volt,

as they are introduced into the marketplace . The autos

team is exploring the benefits of electric shuttle vans for

employees and customers at the facilities .

• Recycling . Recycling programs are being added in

locations such as the Mira Loma and Benicia, Calif ., ramps .

• Lighting Tower Upgrades.A$2.5millionefforthas

upgraded auto facilities with more efficient lights . The

project,whichcallsforanadditional$3.5millioninfuture

investments, will result in more towers overall to increase

safetyandsecurityatautoramps.Newmetal-halidelamps

provide more targeted light, more closely replicate natural

light and better illuminate the facilities . The overall increase

in towers will result in more energy use; however, in a

one-to-onecomparisonthenewtowersaremoreenergy

efficient than their predecessors .

nEw mExico Rail faciliTy will SERvE GRowinG inTERmoDal nEEDSIntermodal transportation is one of Union Pacific’s top

growth areas . As more freight shifts from highway to rail

or comes off ocean vessels and travels inland, we expect

traffic on our western lines to increase significantly in the

coming years . Anticipating our customers’ needs, we

beganconstructiononanall-newrailandfuelingfacility

just outside Santa Teresa, N .M ., in August 2011 .

UnionPacificisinvesting$400milliontoward

developmentofthe2,200-acresitethatisexpectedto

add$500milliontotheNewMexicoeconomy.Set

along the historic railroad corridor known as the Sunset

Route, this facility is projected to bring 3,000 jobs

to the area during construction from 2011 to 2015, and

600 permanent jobs in the Santa Teresa area upon

completion . It also gives southern New Mexico an

inland port that will serve as a strategic focal point for

goods movement .

Once complete, the facility will be 11 .5 miles long and 1

mile wide, and include 200 miles of railroad track and 26

buildings for yard operations . Previous Union Pacific

projects like this one have stimulated millions of square

feetofadditionalindustrial-relateddevelopmentwithin

five to 10 miles of the rail site including warehouses,

distribution and storage facilities .

43

COmmITmENT TO CUSTOmERSAND SUPPLIERS

foSTERinG SUPPliER DivERSiTyFor 30 years, Union Pacific has demonstrated our

commitment to nationally support and embrace supplier

diversity . Our supplier diversity program was the first

among the largest U .S . railroads and focuses on spend,

utilization and professional development .

From$10millioninourfirstyeartomorethan$370

million through 2011, we are expanding opportunities

forminority-andwomen-ownedbusinessestobe

successful . Our program permeates the entire

organization, impacting purchases of fuel, engineering

services, railroad maintenance and construction,

rolling stock maintenance, and technology .

2011 SUPPliER DivERSiTy facTS anD fiGURES• UnionPacificpurchasedgoodsorservicesfrom

diverse suppliers in 39 states, including all 23 in

which we operate .

• Our spending with diverse suppliers grew approximately

4 percent each year from 2007 to 2011 .

• Wedirectlypurchasedgoodsorservicesfrommore

than 400 diverse businesses .

• Approximately10percentofUnionPacific’scriticaland

prime suppliers reported indirectly purchasing goods

or services with diverse suppliers, demonstrating their

support of our supplier diversity initiative .

mEmbERShiPS, boaRDS anD commiTTEES• NationalMinoritySupplierDevelopment

Council (NMSDC)

• NMSDCTransportationGroup

• MidwestMinoritySupplierDevelopmentCouncil,

board and advisory member

• ChicagoMinoritySupplierDevelopmentCouncil

• DallasFort-WorthSupplierDevelopmentCouncil

• HoustonSupplierDevelopmentCouncil

• Women’sBusinessEnterpriseNationalCouncil

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our commitment to ethics begins with our board of directors and passes through every level of our organization. we will continue to work diligently to maintain the highest standards and provide quality service and value to our customers, investors and employees.

GovERnancE & EThicS

45

Union Pacific wants the way our company operates to be a source of pride for employees and to create a bond with customers, investors and community partners. in support of that goal, all employees are expected to comply with applicable laws and regulations and adhere to high ethical standards, including honesty, fairness, integrity and respect. Ethics training is incorporated into many of our employee education offerings. Read our complete Statement of Policy concerning business conduct and Ethics for Employees.

SETTinG PolicyGovernance policies are set by Union Pacific’s board of directors, composed of at least a

majority of independent directors that includes no more than two management directors at any

given time . Additionally, each year the board elects a chairman, who may or may not be the CEO

of the company . If the individual elected as chairman of the board is not an independent director,

the independent directors also elect a lead independent director . Read our complete Corporate

Governance Guidelines and Policies .

Our board has four standing committees – audit, finance, compensation and benefits, and

corporate governance and nominating – each of which is composed entirely of independent

directors and operates under a written charter .

The corporate governance and nominating committee is responsible for developing and reviewing

the appropriate skills and characteristics required of our board members . Board members

are selected based on their familiarity with our business, diverse backgrounds and perspectives,

relevant regulatory and stock exchange membership requirements, business experience and

customer/supplier status .

Membersoftheboardandcommitteesself-evaluatetoassessperformance,includinginviting

comments on all aspects of the board and each committee’s process . These evaluations serve as

the basis for a discussion of the board and committee performance, as well as recommended

improvements .

commUnicaTionS wiTh ThE boaRD of DiREcToRSWe believe it is important for shareholders to have access to members of Union Pacific’s board

of directors and we ensure information and inquiries are received by the intended director or

directors . The board has appointed and authorized the secretary of the company to be responsible

for processing communications from interested parties to directors . Communications from

shareholders are forwarded directly to the appropriate board members .

gUIDINg POLICIES & PRINCIPLES

46

EmPloyEE RolEEmployees also are provided avenues for communication on governance issues . The Union Pacific

Values Line allows employees and third parties to report governance concerns, anonymously or

openly . Concerns could include questionable accounting, internal accounting controls or auditing

matters . Employees can also report directly to the internal audit department .

EQUal oPPoRTUniTy & haRaSSmEnT PoliciESAdiscrimination-freeworkplaceandfairtreatmentarefundamentalrightsofallUnionPacific

employees . Union Pacific has an Equal Employment Opportunity Policy that extends to all

employees and applicants without regard to race, color, gender, national origin, age, religion,

sexual orientation, gender identity, veteran status or disability or genetic information . In addition,

our Harassment Policy prohibits offensive behavior directed at individuals based on any of

the aforementioned protected characteristics . Because we also prohibit discrimination based

on sexual orientation and gender identity – in hiring, promotion, demotion, termination, transfer,

leaves of absence, compensation and training – our policy exceeds federal and most state

employment laws .

EThical STanDaRDSUnion Pacific has adopted a Code of Ethics for the CEO and Senior Financial Officers, Statement

of Policy Concerning Business Conduct and Ethics for employees and Code of Business Conduct

and Ethics for Directors . Each was developed and is maintained by the board’s corporate

governance and nominating committee . We continually assess the appropriateness of these codes

and policies and recommend changes that comply with federal regulations to continue to promote

and support good governance . Additional information about our ethical standards and copies of

these codes and policies are available on the company’s website under Corporate Governance .

comPEnSaTionTo ensure that our employee compensation is competitive, Union Pacific’s board of directors uses

an independent compensation consultant to review and evaluate our compensation programs . The

compensation and benefits committee uses that information to make recommendations to the board

with regard to adjustments and changes needed to maintain competitive compensation practices .

gUIDINg POLICIES & PRINCIPLES

47

2011 awaRDS & REcoGniTion

REcoGniTion

48

bRUnEl awaRDS inTERnaTional Railway DESiGn comPETiTionUnion Pacific’s Heritage Locomotive Fleet Program

was the 2011 Brunel Awards International Railway

Design Competition winner . The fleet represented the

United States in the “Industrial Design, Corporate

Branding, Graphics, and Furnishings” category .

Internationally renowned leaders in the area of rail

design and engineering evaluated the applicants .

chRySlER oUTSTanDinG SUPPoRTChrysler Group LLC recognized Union Pacific for

outstanding logistics and transportation support . Chrysler

recognized suppliers who fared well on its External

Balanced Scorecard, a rating system that evaluates

supplier performance in areas such as quality, delivery,

cost, warranty and partnership in addition to input

from senior leadership . 

conaGRa millS Rail caRRiER of ThE yEaRConAgra Mills named Union Pacific its Rail Carrier

of the Year . Union Pacific’s selection was based upon

servicelogquality,attentiontoon-timedelivery,and

how aggressively the railroad aided ConAgra Mills in

obtaining new business .

Corporate responsibility 100 bEST coRPoRaTE ciTiZEnSCorporate Responsibility named Union Pacific among its

100 Best Corporate Citizens for the second consecutive

year . The methodology collected information on 324

data points in seven categories: climate change, employee

relations, environment, financial, governance, human

rights and philanthropy . Union Pacific ranks among the

leaders in governance and philanthropy .

comPany awaRDS & REcoGniTion

Diversity Careers in engineering anD information teChnology bEST DivERSiTy comPanyDiversity Careers in Engineering and Information

Technology named Union Pacific a Best Diversity

Company for the third consecutive year .  The magazine

chose Union Pacific based upon its support of women

and minorities, efforts to support work/life balance,

and supplier diversity commitment based on feedback

from the magazine’s readers and website visitors .

EaSTman chEmical comPany’S SUPPliER ExcEllEncE awaRDUnion Pacific received Eastman Chemical Company’s

Supplier Excellence Award for overall company

performance, the highest level of all awards presented

in the Eastman Supplier Excellence Program . Union

Pacific earned this award for the second consecutive

year and remained the only railroad to be honored .

The award recognizes consistent performance in

providingEastmanwithhigh-qualityservicesandfor

working on Eastman’s behalf to improve its efficiency

and competitiveness in the changing market .

EPa clEan aiR ExcEllEncE awaRDThe U .S . EPA honored Union Pacific Railroad with a

Clean Air Excellence Award for developing Genset

switching locomotive technology . EPA awardees were

chosen based upon development of unique, sustainable

solutions that directly reduced hazardous emissions

and toxic air pollutants and provided a model for others

in their industry to follow .

2011 AWARDS & RECOgNITION

49

2011 AWARDS & RECOgNITION

EPa SmaRTway TRanSPoRT ToP ScoREUnion Pacific Distribution Services (UPDS) achieved

the EPA’s SmartWay Transport program’s highest score

by utilizing most of the commercially available fuel saving

strategies and actively evaluating the latest emerging

technologies . Company ratings were calculated by various

fuel-efficiencyandemissioncontroltechnologies,

policies and fleet strategies .

EvERGREEn ShiPPinG aGEncy (amERica) coRPoRaTion vEnDoR of ThE yEaR*Evergreen Shipping Agency (America) Corporation named

Union Pacific its 2010 Vendor of the Year . The award

is presented annually to suppliers providing excellent

service and maintaining high performance levels .

Evergreen recognized Union Pacific for its excellence

in quality, service and support .

fortune moST aDmiRED comPanyFortune named Union Pacific the most admired company

in the trucking, transportation and logistics category .

Union Pacific ranked No . 1 in seven of nine reputation

attributes identified by Fortune: people management,

use of corporate assets, social responsibility, quality of

management,financialsoundness,long-terminvestment

and quality of products/services .

GEnERal moToRS SUPPliER of ThE yEaR*General Motors (GM) honored Union Pacific with a

2010 Supplier of the Year award . A team of GM

purchasing, engineering, quality, manufacturing and

logistics executives determined the winners . Decisions

were based on supplier performance in the areas

of quality, service, technology and price .

hEinZ noRTh amERica caRRiER of ThE yEaRHeinz North America honored Union Pacific as its 2011

Carrier of the Year award winner for the railroad’s

outstanding performance in transporting refrigerated

and canned products .

iDaho aSSociaTion of commERcE & inDUSTRy EnviRonmEnTal ExcEllEncE awaRDThe Idaho Association of Commerce & Industry (IACI)

presented Union Pacific with its 2011 Environmental

Excellence Award . The IACI Environmental Excellence

Award provides recognition to businesses which, through

innovative environmental leadership and accomplishment,

achieved outstanding results in environmental protection

and enhancement .

lanDSTaR SySTEm, inc. inTERmoDal caRRiER of ThE yEaR*Landstar System, Inc . named Union Pacific its 2010

Intermodal Carrier of the Year . Criteria for the award

included performance in the areas of customer service,

damageprevention,linehaulanddoor-to-doorservice.

military times eDge bEST foR vETS EmPloyERMilitary Times EDGE named Union Pacific among the

Best for Vets Employers in 2011 . The magazine ranked

employers based on veteran recruiting, training and

mentoring practices; reserve policies; and corporate

culture’s representation, retention and support of veterans

and military personnel . The publication ranked Union

Pacific as one of just three companies in the highest

category, Platinum .

*Awarded in 2011 for prior year’s performance.

50

naTional bUSinESS GRoUP on hEalTh bEST EmPloyERS foR hEalThy lifESTylESUnion Pacific was named a 2011 Best Employers for

Healthy Lifestyles award winner from the National

Business Group on Health (NBGH) . Union Pacific earned

platinum status each year since the award’s inception

in 2005, and is one of only six U .S . employers to earn

platinum status each of the past six years . Union Pacific

was the only railroad or transportation provider among

the companies honored by the NBGH, which recognized

employers that responded to the need to improve their

workers’ health, productivity and quality of life .

naTional chambER foUnDaTion hiRinG oUR hERoES awaRDThe National Chamber Foundation presented Union

Pacific with the Hiring Our Heroes Award for Post 9/11

Veteran Employment and Internships . Hiring Our Heroes

awards recognize businesses that have gone above and

beyond to honor the sacrifices America’s military families

make in their service to the nation . Union Pacific was the

only railroad to win a Hiring Our Heroes Award .

Soy TRanSPoRTaTion coaliTion ToP PERfoRminG RailRoaDUnion Pacific was selected as the top performing railroad

by leading U .S . agricultural shippers in the second

annual Soy Transportation Coalition (STC) Rail Customer

Satisfaction Index . Companies were graded on customer

service,on-timeperformanceandcosts.

TExaS commiSSion on EnviRonmEnTal QUaliTy EnviRonmEnTal ExcEllEncE awaRDTheTexasCommissiononEnvironmentalQuality

(TCEQ)presentedUnionPacificwithanEnvironmental

Excellence Award for developing environmentally

friendly locomotives .

ToyoTa ToP RailRoaD in on-TimE SERvicE PERfoRmancE anD cUSTomER SERvicE*Toyota Logistics Services recognized Union Pacific as the

toprailroadinon-timeservice.UnionPacific’scollaborative

focus on responsiveness, process standardization,

problem solving and consistent transportation service

performance contributed to this award .

ToyoTa canaDa inc. loGiSTicS PaRTnER awaRD foR on-TimE PERfoRmancE anD cUSTomER SERvicEUnion Pacific received Toyota Canada Inc .’s Logistics

Partner Award for the fourth consecutive year . The

railroadwasrecognizedforon-timeperformanceand

customer service .

TRanSPoRTaTion commUniTy awaREnESS anD EmERGEncy RESPonSE naTional achiEvEmEnT awaRDUnion Pacific earned the Transportation Community

Awareness and Emergency Response (TRANSCAER)

National Achievement Award for the fourth consecutive

year . The award recognizes extraordinary achievement

in support of the TRANSCAER initiative, the voluntary

national outreach effort to help communities prepare

for and respond to a possible hazardous material

transportation incident .

TTS Rail caRRiER of ThE yEaR*Transportation and logistics provider TTS, LLC named

Union Pacific its 2010 Rail Carrier of the Year . Awardees

were selected based on dedication to bringing creative

solutions to TTS and helping grow its customer base

through exceptional service .

wwl vEhiclE SERvicES amERicaS Rail caRRiER of ThE yEaR*WWL Vehicle Services Americas recognized Union

Pacific as its 2010 rail carrier of the year . Union Pacific

received the award based on its performance in the

areas of timely delivery, quality and customer service .

2011 AWARDS & RECOgNITION

*Awarded in 2011 for prior year’s performance.

51

*Awarded in 2011 for prior year’s performance.

2011 AWARDS & RECOgNITION

aSSociaTion of amERican RailRoaDS haRolD f. hammonD awaRD*TheAssociationofAmericanRailroadsnamedJohnKirwan

the 2010 Harold F . Hammond Award winner . A machinist

inHinkle,Ore.,Kirwanwashonoredastheindividual

railroad employee who has demonstrated outstanding

safety achievement during the preceding year .

hiSPanic aSSociaTion on coRPoRaTE RESPonSibiliTy yoUnG hiSPanic coRPoRaTE achiEvERThe Hispanic Association on Corporate Responsibility

(HACR)namedUnionPacific’sRosaLaPuente-Flowers

a 2011 HACR Young Hispanic Corporate Achiever .

La Puente-Flowersservesasdirectorofstrategicsourcing

– Supply, and was recognized for her educational

achievements, business acumen, personal leadership,

community involvement and volunteer efforts .

inTERmoDal aSSociaTion of noRTh amERica SilvER kinGPin awaRDThe Intermodal Association of North America (IANA)

named Barry Michaels, vice president of Intermodal

OperationsatUnionPacific,the2011IANASilverKingpin

Award winner . The IANA Awards Committee recognized

Michaels for a lifetime of tireless work as an intermodal

advocate, serving twice as IANA’s chair, seven years as

chair of the IANA Operations Committee and 14 years

on the Intermodal Interchange Executive Committee .

EmPloyEE awaRDS & REcoGniTion

profiles in Diversity Journal womEn woRTh waTchinGProfiles in Diversity Journal recognized Linda Brandl,

vice president and general manager – Automotive,

in its 10th annual Women Worth Watching feature .

The magazine recognized women executives who share

personal leadership successes designed to encourage

aspiring business leaders and help advance women

to leadership ranks .

TRanSPoRTaTion commUniTy awaREnESS anD EmERGEncy RESPonSE chaiRman awaRD*Transportation Community Awareness and Emergency

Response (TRANSCAER) named Dave Buccolo,

general manager – Central California Traction Company,

the 2010 TRANSCAER Chairman Award winner for the

second consecutive year . Buccolo was recognized for

his safety record and level of participation in TRANSCAER,

a voluntary national outreach effort to help communities

prepare for and respond to a possible hazardous

material transportation incident .

52

We will continue to invest in our employees and in the economic development of the communities

thathaveplayedasignificantroleinourgrowthandsuccess.Alreadyafuel-efficient,environmentally

responsible and safe mode of freight transportation, we seek to improve our operations and

invest in innovative technology to advance our sustainability efforts . We remain focused on safety,

customer service, productivity and being an employer of choice . We will do these things not

because we have to, but because these are the things we value most .

The 2011 Union Pacific Sustainability and Citizenship Report shares our initiatives and progress

thus far . We will continue to seek improvement in all aspects of our business .

movinG foRwaRD

53

ADDITIONAL RESOURCES

Union PacificFor ongoing updates on our citizenship and sustainability efforts,

visit www .up .com .

• Media.Up-to-dateinformationaboutUnionPacificanditsworkin

the community

• Environment . Sustainability commitments and progress

• Employees . Programs and services available to the members of

our workforce

• Customers . Product offerings and business groups

• Investors . Annual report, proxy statements and other SEC filings

caUTionaRy infoRmaTionOur 2011 Sustainability and Citizenship Report provides additional explanatory information regarding Union Pacific that may not

be available, included or directly derived from information in the company’s annual report.

This report includes statements and information regarding future expectations or results of the company that are not historical facts . These

statements and information are, or will be, forward looking as defined by the federal securities laws . Forward looking statements and information

can be identified by use of forward looking terminology (and derivations thereof), such as “believes”, “expects”, “may”, should”, “will”, “would”,

“intends”, “plans”, “estimates”, “anticipates”, ”projects” and other words or phrases of similar intent . Forward looking statements and information

generally include statements and information regarding: the company’s expectations or forecasts with respect to general economic conditions in

the United States and the world; the company’s financial and operational performance; increases of the company’s earnings; demand for the

company’s rail service; improving customer service; enhancing profitability; volume and revenue growth; efficiency improvements and increasing

returns; improving asset utilization; the effectiveness or growth of new and newer services; management of network volumes; increasing

shareholder value; total amount of capital investments; completion and effectiveness of capacity expansion and other capital investments, and

other investments in infrastructure improvements; returns on capital investments; improvements regarding safety of our operations and equipment;

and effectiveness of plans, programs and initiatives to reduce costs and other efficiency improvements .

Forward-lookingstatementsandinformationshouldnotbereadasaguaranteeoffutureperformanceorresultsandwillnotnecessarilybe

accurate indications of the times that, or by which, such performance or results will be achieved . Forward looking statements and information are

subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements .

Forward-lookingstatementsandinformationreflectthegoodfaithconsiderationbymanagementofcurrentlyavailableinformationandmaybe

based on underlying assumptions believed to be reasonable under the circumstances . However, such information and assumptions (and, therefore,

suchforward-lookingstatementsandinformation)areormaybesubjecttovariablesorunknownorunforeseeableeventsorcircumstancesover

whichmanagementhaslittleornoinfluenceorcontrol.TheriskfactorsinItem1Aofthecompany’sAnnualReportonForm10-K,filedFebruary3,

2012, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in the

forward-lookingstatementsandinformation.Thisreportshouldbereadinconsiderationoftheseriskfactors.Totheextentcircumstancesrequire

or the company deems it otherwise necessary, the company will update or amend these risk factors in subsequent annual reports, periodic reports

onForm10-QorcurrentreportsonForm8-K.

Forward-lookingstatementsspeakonlyasofthedatethestatementwasmade.Weassumenoobligationtoupdateforward-lookinginformationto

reflect actual results, changes in assumptions or changes in other factors affecting forward looking information . If we do update one or more

forward looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other

forward-lookingstatements.

Rail inDUSTRy• Association of American Railroads

• Freight Rail Works

• Federal Railroad Administration

54

fUTURE REPoRTinGUnion Pacific is committed to providing an annual update on performance in the areas of environmental, social impact and governance efforts. This is our third such report, and we are already thinking ahead to next year.

fEEDbackUnion Pacific welcomes any and all feedback on our citizenship and sustainability efforts. Please send comments or questions to [email protected].

fUTURE REPoRTinG anD fEEDback